Contract lifecycle management (CLM) is a term used in the business world to describe the process of creating, managing and tracking contracts throughout their entire lifecycle. The goal of CLM is to optimize the performance of contracts and improve contract visibility.
The contract lifecycle begins when a company initiates a contract request. This request can come from various departments within the company, such as sales, procurement, or legal. Once the request is initiated, it will go through a series of approvals before it becomes an official contract.
Once the contract is approved, it will be sent to the other party for signature. After both parties have signed the contract, it becomes active and enters the performance phase. During this phase, both parties are required to perform their obligations under the contract.
After the performance phase is complete, the contract enters into the close-out phase. During this phase, any final payments or deliverables are made and all loose ends are tied up. Once the close-out phase is complete, the contract is officially closed. The entire process of creating, managing and tracking a contract from beginning to end is known as Contract Lifecycle Management (CLM). By using CLM software, companies can automate and streamline this process, making it more efficient and less time-consuming.